Numerous bodies develop standards and guidance documents for accountants and auditors around the world. For example, the International Federation of Accountants (IFAC) develops International Standards on Audits (ISAs) and other guidance documents for accountants. In the United States, the American Institute of Certified Public Accountants develops Generally Accepted Auditing Standards (GAASs). An auditor performs an audit based on the guidance of such guidance documents. A risk-based audit typically involves several steps, including assessing risks of material misstatements in financial statements, designing and performing audit procedures to respond to assessed risks and reduce the risks, and issuing an audit report. The risk-based audit focuses audit procedures on areas identified by the auditor as having the most potential for causing material misrepresentations in the financial statements.
Currently, auditors complete the audit requirements by completing a number of forms to document risks. For example, IFAC develops a manual based on which ISA Engagement Forms are created to assist auditors who perform audits. Each form is completed independently of other forms. This creates inefficiencies, as auditors have to enter the same data multiple times across multiple forms, and because the information is spread out across multiple forms it is difficult for auditors to identify risks and the various attributes associated with them. Accordingly, errors may propagate across multiple forms and important information may be overlooked. Furthermore, overlooking a key issue presents a risk of liability for auditors.
Accordingly, there remains a need for improved methods, software and devices for visualizing risks in a risk-based financial audit.